1998 4 x 4 shift problems

The last time I went to shift into 4 hi or 4 low the lights flickered as if the shift was working but went back to 2 hi. The owners manual give an override procedure. That doesn't work either. I read on this forum a few posts that suggest disconecting the batery to reset the logic comand. Has anyone had any success with this? I can hear something what sounds like a relay when I attempt to shift but nothing else. Is this something that will set a code to help diagnosis? Any idea what code to expect?

Disconnecting the battery didn't do anything. Can't find a fuse marked 4x4 or transfercase? Dealer quoted me prices for the Enocder motor $488 and $281 for the Shift modulator. Claimed the code would only indicate it might be one or the other and I'd have to bring it in for diagnostis.

A similar problem with my 1999 LS started Oct 2003 (on pressing 4hi, flashing 4hi or all lights out, then back to 2hi). After 4 or 5 new transfer case control modules, the dealer said it was fixed. NOT! Now (Jan 2004) after 9 days in the shop it SEEMs to be working with a new encoder and new transfer case control module; we'll see. Word from the dealer is these two parts should always be replaced together (a $1300 repair!!).

P.S. Twice prior, similar symptoms were relieved (maybe not fixed?) by pulling dash fuse 8 (courtesy lamps) for a minute, replacing it, and cycling the ignition 5 times from "off" to "run" ("to clear codes"). That procedure comes from some GM bulletin provided by the dealer.

I'm having the same problem. I had the dealer diagnose the problem and they said the encoder motor needed to be replaced. well i replaced it and no fix,now i will look at replacing the module to.Thank you for the input,I'm already $500 into this.

P.S: As you Know the part are oem parts only with no aftermarket available, But i found a supplier that deals in oem parts cheep.I don't know how they do it but the encoder motor at the dealer was $440 this company has them for $299. The web site is 1Aauto.com